Leveling Up Your Sales Efforts Through Client-Centric Strategies with Ken Lundin

Did you know that acquiring a new client costs more than keeping an existing one? Consequently, it is quintessential for software companies to maintain healthy, long-standing relationships with their clients or customers to grow their revenue in the long run. But do these companies dedicate enough time to their clients? Or are they more focused on themselves?

Ken Lundin, the President at Ken Lundin and Associates, admits that most SaaS companies make mistakes because they are more focused on driving revenue instead of crafting client-centered campaigns that solve customers' problems. Additionally, he claims that a product or service can succeed if it meets a client's needs and solves their problems. Otherwise, it doesn't stand a chance.

Ken provides a meaningful piece of advice to sales teams focusing on the client acquisition process, encouraging them to pay more attention to messaging and market fit. In the new episode of Digital Footprint, Ken and Carlos Gonzales also discuss whether it is possible to create a predictable sales pipeline and the obstacles one must overcome when crafting one.

Guest-at-a-Glance

💡 Name: Ken Lundin

💡 What he does: Ken is the President at Ken Lundin and Associates

💡 Company: Ken Lundin and Associates

💡 Noteworthy: Ken Lundin and Associates is the company focused on helping SaaS founders grow their ROI by creating a unique consulting plan based on the company's specific goals.

💡 Where to find Ken: LinkedIn | Official Website

Want to bring a SaaS product to market, quickly?
Book a consultation: https://tyrannosaurustech.com/contact/

Connect with our cohosts Richard Simms &  Carlos Gonzalez on Linkedin

Transcript

Carlos Gonzalez: [00:00:00] Hello and welcome to another episode of the Digital Footprint. I'm Carlos Gonzalez and this episode is brought to you by Tyrannosaurus Tech, a company that provides superior software development, innovative design, and simple solutions for your organization's most complex problems. Today our guest is Ken Lundin, president at Ken Lundin & Associates.

[00:00:26] Ken, thanks for joining us today.

[00:00:28] Ken Lundin: [00:00:28] Hi, Carlos, how are you? Let's, let's get this thing rocking and rolling, right? 

[00:00:32] Carlos Gonzalez: [00:00:32] Awesome. Okay. To give our audience some background on yourself, can you tell us about your role at Ken Lundin & Associates?

[00:00:41] Ken Lundin: [00:00:41] Sure. It's a, you know, quick and easy. So, I'm the president of Ken Lundin & Associates. We are a team of consultants and you know, we do kind of things we're gonna talk about today, which is how to build predictable, systematic ways to grow revenue for you know, a disproportionate number of our people or a high percentage of our clients are SaaS companies, you know, professional services.

[00:00:58] So this is, this ought to be a real good time for us to talk about this. 

[00:01:03] Carlos Gonzalez: [00:01:03] Great. So Ken, let's get started. What are the biggest trends you're seeing right now with SaaS and the, your product sales?

[00:01:12] Ken Lundin: [00:01:12] Yeah, I think what's interesting about that is, you know, you say trends, right, but you didn't say good, good or bad. So, you know, just yesterday, I mean, I found out one of the trends. I think SaaS founders are doing something really, really wrong. And one of the biggest trends that I'm seeing is we're focused so much on driving, you know, ARR and driving annual recurring revenue that we're forgetting that delighting the customer and primary outcomes for the customer

[00:01:38] is the true path through. So I'll give you an example. In the last week I've experienced this twice. A SaaS company, I bought product, you know, product X from, bought it a year ago and I am up for renewal with both of them in the next 90 days. I have not heard anything from them. They've not asked me how the products performed.

[00:01:55] They have not shown me how to make the product perform better for my team. And then all of a sudden, right in front of the renewal, "Hey, you're our most valuable customer." And I said, "I just canceled." You know, because we're so focused on growing ARR that we say, "Hey, this whole front end of the pipe." You know, if you're a SaaS company, the growth to ex, the way to get to exponential growth is actually that backend.

[00:02:19] So one of the trends I'm seeing is that as SaaS is becoming a predominant way for entrepreneurs and founders to make, you know, enterprise valuations, they look at as a quick ticket to make some money. They're leaving the customers behind and because of that, they're putting there, they're putting themselves in a very difficult situation.

[00:02:36] You know, if you have a 20% churn, 20% your clients leave you annually, you got to do 25% growth on new load, on the new stuff just to get back to zero. So that's probably one of the trends. I think, ultimately, other than that, I mean, everybody's pushing the SaaS. We know that it's been a trend for awhile, but you're starting to see a really impact on the sales tax base.

[00:02:56] You're starting to see governments and hospitals start to finally do the stuff that, you know, we were trying to pay them to do years ago. So I know that's not what you wanted. I don't know that you wanted anything, but I can tell you right

[00:03:06] now from a growth perspective, that's a big, big mistake that some of these companies are making. 

[00:03:12] Carlos Gonzalez: [00:03:12] Yeah. Yeah. I definitely see what you're saying. What, what are some steps that companies can take to fix that?

[00:03:19] Ken Lundin: [00:03:19] Well, I think it starts with how you think about your customer to begin with or how do you think about your client. You know, do you think about how the outcomes that I can produce for them based on the problems they're having or do you think about them as a means to an end to a revenue number. And too often at SaaS, we're seeing the latter, we're seeing them look like a revenue number.

[00:03:38] And so that probably the best place to dig into that as a SaaS, as a SaaS founder, is to really look at the idea or, hey, you could be a corporate development center and a large, large fortune 500, you're still rolling out a new product, right? So these apply to that as well. But it's really the idea of, instead of focusing on like a lot of times software companies will focus on the dashboard and they'll say, "Oh, Carlos logged in 14 times this month. Carlos must be a happy customer." Well, if we'll move past that and we'll start focusing on outcomes for Carlos, right, how do we produce better and better outcomes for Carlos? Carlos does become a happy customer who by the way, will also buy more. Right? 'Cause when you're happy with what's going on, you'll buy some more. So I think probably the number one thing we can do is change the flip the script on the perception and this, and the second thing that

[00:04:28] you can do that's really, really critical to in this component is you can look at this.

[00:04:32] If you want to exponentially or systematically grow your company, the path to growth is through active account management and customers, and then customer success teams. They are not a by-product that handles trouble. They should be something that's proactive, because that's how you could actually get doubles and triples out of your revenue growth for your product or your company. 

[00:04:54] Carlos Gonzalez: [00:04:54] Got it. What are some sales strategies that are working really well right now, in your opinion?

[00:05:01] Ken Lundin: [00:05:01] Well, you're seeing some stuff like there's a there's technologies out there that are allowing more complex enterprise solutions, like software solutions to be treated as some of the other things that people did freemium as with, right? So in SaaS, a lot of times it was like, "Hey, we'll give you this freemium. Just try it for a while."

[00:05:18] And you'll get 30 or 60 days or a number of iterations. So you're seeing some platforms out there and they're starting to scale down where they're less expensive to use, but like walk me as one of them as an example. Where you're able to actually, even if in a complex B2B sale that requires a long implementation cycle, you're actually able to use that to kind of show a customer at what the journey looks like and for them to touch and feel the software.

[00:05:41] I think that's doing something interesting, because as you talk about that and the idea of conversational marketing for those companies, they're able to then better resource the use of their sales team. Because the sales team doesn't really need to talk to somebody until they're actually an opportunity, instead of trying to nurture them through in some long, drawn out discovery process where they're helping them discover what it is they're looking for. You know, now the downside of that is if you did that process and you let them walk themselves through it poorly, then it can certainly inhibit growth. But I think the automation of like the sales tech stack for companies, you know, is been, been under a movement, it's picking up a snowball like exponential growth at this point. 

[00:06:28] Carlos Gonzalez: [00:06:28] Do you think product companies should avoid services altogether?

[00:06:34] Ken Lundin: [00:06:34] I think it depends on the goal. Right? It's super hard as a it's, you know, everyone says, "We'll productize your services." And then they say, "Well, if you have a product, why would you have a service? Because that defeats the purpose." So I think there's two things. Let's say that you're just developing your post revenue startup or post revenue corporate development team,

[00:06:56] you've put this product into the market and your goal is to maximize enterprise value. Well, we know that they are and MRR the way to do that and that professional services stuff that people have to touch may inhibit your actual enterprise value. You may not get as high of a valuation. On the other hand, if you're in that process and you're saying, "Well, wait. Let's use the service team to figure out how we can automate best practices,

[00:07:24] so you use them as a part of your gaining product market fit and your product development cycle." Now there's a really great way to lean into getting direct feedback from customers to develop the products. You know, like Carlos, like I know that in, in what you guys do, I know there's a lot of the idea of the design of the product matters.

[00:07:45] And so that's a great way to solicit feedback from your market on an ongoing basis, because you want to continue to,... You know, I did a LinkedIn post the other day and I said, "Do you want to know how to develop the perfect product?" Carlos, go ask your customers the following - What's the biggest problem you can solve right now? Right?

[00:08:05] And by using a professional services component with the tech stack or the software product, I think you can answer those questions. So it depends on, you know, do you have, do you have a true north on what you're trying to accomplish as a company and where you're trying to take it, because I think professional services can lend itself to a lot of areas.

[00:08:26] You just got to watch how you am, watch how you deploy it, I guess would be my answer.

[00:08:31] Carlos Gonzalez: [00:08:31] Got it. No, that makes a lot of sense. So I know that a lot of companies struggle with creating their own sales team or when it's the right time to create that team and, and, and and scale it. Can you give us some insight on, oh on those things and w when is the right time and how, how should a founder go about it?

[00:08:53] Ken Lundin: [00:08:53] Yeah. Yeah, that's a really good question, 'cause the moving from founder-led sales to installing a sales team is a pretty big deal, right?

[00:09:02] You know, Carlos, you and Richard know that if you've hired salespeople and then you've taken it back and you've sold for yourself and it just tends to be one of these kind of things where you're like, "Man, is there a shortcut to do this,

[00:09:12] 'cause there's so many things I, as a founder could be doing?" So we have to answer that question. We have something called the Sales Alpha Roadmap. And the Sales Alpha Roadmap kind of first three phases say, "Get to product market fit. Install the process of sales. Install the change management mechanisms, business mechanisms for the process of sales." Right?

[00:09:30] So that's our launch, you know, that's our launch kind of our level up and our level flight components of our Sales Alpha Roadmap. So the answer that question is this. You must get to product market fit and do it in a meaningful way. Most people don't actually get all the way there. They go, "Hey, we got some people buying some stuff, so we must already have product market fit."

[00:09:54] No, no, no, no, no, because if you can't speak to the exact part of the biggest problem your client or customer is having that you make the most meaningful impact on, you don't have product market fit yet. And here's why it's important. Because as you go through and install the process and you put a sales team in place and everything else, as the founder, you are generally always going to be the best salesperson that your company has ever had. And so how do we get past the emotion and the, the stuff you carry around in your head that helps you sell deals that we can make it scalable for a sales team? Will we get to great product market fit so we can stick those processes in place? Because you get to ebb and flow like, you know, Carlos, you're going to get on a phone call, right?

[00:10:38] And you're like, the conversation can be this bouncing ball and you're following it just fine and you're, you can go anywhere with it because you're totally familiar with their capabilities. Now put a sales person into the environment. Forget about it. Right? As my New Jersey friends say. So I think one to go from founder-led sales to installing a sales team

[00:10:58] first, you have to have pro, product market fit and you have to be able to answer that question. What is the biggest problem that we solve for our customers? I'm gonna tell you this. Listen hard. 'Cause if you say that it's a you provide better reporting or better data, nobody wakes up and wants to spend 50,000 bucks on that.

[00:11:15] If you say, "We help our costumer make better decisions around this particular thing, which they haven't had visibility into so that they could do these things." Okay, now we're talking. So first product market fit. Second is... man, hiring salespeople's a pain. Like you gotta be okay with the idea that it's going to take work to put in a repeatable process that they can follow.

[00:11:37] Now, there are companies like us who go out and do that for people, but... I mean, that's a, that's a process, you know. It's it's, "Hey, how do they have the discovery call? Hey, what are the objections? What are the questions? What's the process look like? How do they find leads?" And so you need to know that it is not... People look at it, I know I've drowned on about this, I'll stop. People look at hiring a salesperson like it's a variable cost. Right? "Oh, they'll produce X and then they'll sell Y so therefore their salaries half of what they'll make." No, no, no, it's a step of cost people. Because the average salesperson selling an enterprise solution or a software is going to take it,

[00:12:10] there's going to generally take about nine months before they pay for themselves. So if you're not willing to invest nine months of their salary into them, right, then the answer is you're not ready.

[00:12:24] Carlos Gonzalez: [00:12:24] Got it.

[00:12:26] Ken Lundin: [00:12:26] So, does I want,... Does that help, does that

[00:12:28] answer the question? Get close at all? 

[00:12:30] Carlos Gonzalez: [00:12:30] Yeah. Yeah, no, for sure. It definitely does. And I ah I actually have a follow-up question because you know, some CEOs, some founders, they are especially in the, in the, in this SaaS, you know, digital product ecosystem, they, they, they can be more technical and maybe don't have as much experience with sales.

[00:12:52] And what I've seen that, that they tend to do is invest more in the product than actually, you know, figuring out how to sell it. For, for that type of founder that it's it's kind of in that dilemma. What would you recommend them to do, you know, in order to get more of a sales strategy in place?

[00:13:13] Ken Lundin: [00:13:13] Oh, my goodness. So you just opened up Pandora's box, my friend. You didn't tell me we were going to get the VC and cost of capital and private equity and innovation versus traction, or... Oh my goodness. Oh my goodness, my goodness. I just recorded a 20 minute video from my team on this. So here's the deal and I'm not going to go 20 minutes,

[00:13:31] I promise. But there's a couple of things. First of all people, fundamentally founders, if you are looking to get growth capitals, let's talk that you want to be fast growing. If you want to be fast growing, you want to go to growth capital or if you even care about your valuation, we've talked about a couple of times, but in SaaS a lot of people are driving things 'cause they eventually want to sell it.

[00:13:48] If you're looking at driving market evaluations at all, then you probably have things backward. Look, in venture capital and a PE, they call them technical founders and non-technical founders. Right? Non-technical founders, people who can sell our business experience are actually looked at like a second class citizen. Technical founders

[00:14:08] everybody wants. Here's part of the reason they want you though. They want you, because they can get you cheaper. Because you spend so much time as a technical founder, falling in love with the product and thinking the product will sell itself, sell itself. If you're going to B2C, you can put those models in place,

[00:14:24] but if you're going to B2B, that's probably not the case.

[00:14:27] And so if you're really thinking about it, there's, there's two things, right? And there's innovation, you have two choice. So I invest in my product with innovation or do I invest, or do I invest in getting sales traction? The most commonly heard phrase in any investor meeting is, "Show me more traction." It doesn't matter how big your company is.

[00:14:45] "You want a hundred million talking to investors, show me more traction. You mean 2 million, show me more traction." So what drives valuation is what de-risks the deal. Here's why sales matters and here's why you need to lean kind of away from the product every now and then is because sales says the following, "We've established some product market fit,

[00:15:04] we have a way to grow revenue, which means we can grow cashflow." Because what is a business acquisition, it's just an acquisition of cashflow. Right? It's a technical founders really, really, really need to understand, "Hey, I've got to get traction, because you're product is not the thing that's going to get to get into the golden goose.

[00:15:25] It's got to be good enough, but very rarely is it about the product to get to something that's great. It's about the traction you get and the ease with which you acquire people." That's why terms like CAC exist, right?

[00:15:37] CAC- Customer Acquisition Cost. That's why those things, that's why retention matters.

[00:15:43] They're not asking about retention, because they want to know the quality of your product, there are asking about retention, 'cause I wonder the quality your process and how sticky it is. So yeah, for technical founders, we've got to make sure that we're installing processes that give us traction, because it's the easiest thing we can do is go back to what we love, right?

[00:16:00] "Hey, I, you know, I, I like programming, so this easiest thing we can do." So I'm not sure I answered the question, 'cause you got me all fired up. But at the end of the day, know that investing in the product matters, but investing in the product thinking that you have the most original slice of bread known to man ends up actually being, it sucks away from your net income.

[00:16:23] It sucks away from your gross margins. It takes away, it takes away from your evaluations, traction does not. So sales actually is additive. 

[00:16:31] Carlos Gonzalez: [00:16:31] Right, right, right. And, and I I've seen plenty, plenty, there, there are plenty of examples in the real world of, you know, great products that fail because they don't get the sale and poor products that succeed and are, you know, have be gone to become unicorns that you know, they, they were able to figure out the the sales aspect of it.

[00:16:53] So it's definitely super, super important. And so just talking about like pricing a digital product, what, what are the factors that companies must consider before they price their solution?

[00:17:09] Ken Lundin: [00:17:09] Yeah. Product market fit, starting to see like a red broken egg, right? How far back, how broadly do you fit into a massive problem that they're having that they can't solve without you? So, and the other thing is, is by hitting product market fit and then by meaning speak to it directly in the buyer's terms, you get to raise prices.

[00:17:25] I would argue, I would, I would argue, at least it's worked with our entire client base so far knock on wood. We've been able to raise prices with every client we've been in. Carlos, you know, this, I'm talking, I've talked to you about raising prices, right?

[00:17:35] So if you, guys want to talk to Carlos about business, do it now because things are happening. Because they're doing fantastic. But ultimately it comes down, it comes down to this, right?

[00:17:44] It's your product market fit, is going to determine your ability to leverage pricing in a meaningful way. Your ability then to create outcomes for your customers, which we talked about is kind of one of the negative trends going on at the beginning of this, to impact real outcomes for your customers impacts pricing.

[00:17:59] So, you know, I could make it as a... there's all sorts of other things. I can say, "Well, go look at your competitors and figure out that and your website, and then do a financial model and all these other things." Nope. Nope. If you solve a million-dollar problem, price that thing higher. Right? If you solve a six-buck problem, you better price it at a dollar.

[00:18:19] Right? So what, what does that look like? What's the problem that you can solve for people. And you have to be able to explain it to them in their words, not yours, because technical founders, SaaS founders in general, we want to talk in terms of features and benefits, right?

[00:18:34] We want to be able to talk, "Oh, check this off, check this off.

[00:18:36] And we have these API integrations and we have this." But when you're talking to a business buyer, which are the people who have to approve the big checks,... "Tell me the problem you're going to solve for me. Tell me how your product is going to fit into my 12 to 18 month vision of where I want to be." Right?

[00:18:54] And so, as much as I didn't give you, like, "Hey, I do this and that." It's that one more thing we see people miss. They get lazy, they get lazy on product market fit and then the other thing, like if you want to know pricing, look at your pricing today. Look at all the proposals you put out. If your close rates above, say your close rates above 40 or 50%, your price is too low.

[00:19:15] So that's another kind of check that you can do right

[00:19:18] now. 

[00:19:20] Carlos Gonzalez: [00:19:20] Right. And, you know, over the years, like I've talked to lots of entrepreneurs and it always amazes me how, how little attention a lot of them pay to their margin. You know, like, sometimes I see that they don't, they don't even know what their cost is. So, you know, without even knowing that as a base, you know, it's, it's hard to even understand how to price your product.

[00:19:46] And of course there's different strategies, you know, some people go the bootstrap route. Some people go the venture capital route but, but when it comes to margin, can you, can you, can you explain the importance of aiming for higher margins?

[00:20:02] Ken Lundin: [00:20:02] Well, well, a lot of things. I haven't... 

[00:20:04] Carlos Gonzalez: [00:20:04] Or is it important?

[00:20:05] Ken Lundin: [00:20:05] Oh, it is, because you gotta, you know, let's say at the end of the day your income statement is not your financial health, your balance sheet is. And so you have to be able to have some free cash flow that you can actually create this cash balances and do the thing.

[00:20:17] I think ultimately though, I believe there's something called the rule of 72 in software and that's as long as you add your add gross margin plus growth rate you get to 72, right? Then people will actually talk to you about funding your business. That's the first thing. The second thing that we generally try to see as we try to say, "Okay, what is your margin look like in year two?"

[00:20:35] So on a software business run correctly et cetera, you know, we should be able to see margins expanding in year two and potentially get in year three. And so that comes back to kind of the concepts we've talked about of how do you actively provide outcomes, how does your account management or your customer success team engage.

[00:20:52] Those are things that drive margin. I mean, let's be honest folks, right? So, I had to file bankruptcy in 2011 with my first business. I didn't understand how important the darn balance sheet was. Maybe I'm just an idiot. It could be, which could be the case, Carlos, you've known me long enough. I saw you raised an eyebrow.

[00:21:09] But so with that, I become very, very sensitive to the idea of where are we in an economic cycle. And no matter what your political affiliation is, which we won't get into here, we're long in the tooth for how long we've been going kind of straight up. Yeah, COVID gave us a about a 90 day scare and there's a big piece of the economy.

[00:21:28] You know, individuals who would say, "Oh, I don't have a job or whatever." Fine. But if you look at the stock market, which is a leading indicator of where we're going, we're a long tooth on this expansion. So if I'm a software company, any company, I'm thinking, "Okay, if we're long tooth. How do I prepare myself for if something negative happens?"

[00:21:49] Right? I didn't call COVID, but I called the recession and we had, it was, I was on a couple of podcasts before. Kind of we saw some of the stuff happened, but you have to start thinking about the fact that we're not going straight up. And so you need to get better at your customer intimacy, so that you hold them longer because it's cheaper to keep current customers than it is to get new ones.

[00:22:11] And so you have two different margins perspective and I would say the worst thing that can happen, if you take my suggestion, is that you have more cash in the bank and we keep going straight up. Then the best thing that happens, you know, the thing that the risk averse thing that happens is you've got cash in the bank

[00:22:27] and then if things flatten, if companies stopped spending, because the company's only stopped spending for about 90 days last year, right? We're talking now, they're just the whole world's changing, everybody's pocket books are on fire, so they just can't get the money out at fast enough. So lots of, lots of stuff there, but ultimately margins matter.

[00:22:45] Health of a business absolutely matters. And one of the reasons it matters for founders so much is this. Your mental health. A larger bank balance is certainly easier than seeing a smaller one and, you know, I just, I want to wish for everybody that, you know, they have you know, some good mental health and that, that the, the, the hardness of running a business doesn't overwhelm them because they don't price appropriately.

[00:23:11] Carlos Gonzalez: [00:23:11] Right. I want to talk about you know, the sales pipeline, because that is, that is something that every founder is asking themselves at some point, like, "How can I create a predictable, you know, sales pipeline?" But before we get there, you know, I know you've hit hard a few times already on, you know, retaining the customer, expanding those, re those relationships.

[00:23:35] Can you, can you tell our audience a few tips on how they can potentially, you know, retain and expand existing relationships as a way to grow sales?

[00:23:46] Ken Lundin: [00:23:46] Yeah, I think the number one thing you have to do is you have to realize that the most successful software companies have a secondary or third offer. Right? And so if you are a one trick pony today and you only have one software component they buy it and they're done, you're going to have a hard time because you can't create additional value and you can't open up additional doors by talking to them.

[00:24:05] I think, there's a couple of things. So to expand, let's say that you are a software that sells to medium to large sized businesses, one of the things you can do is enact a regularly scheduled referral program. Do not do what everyone else tells you to, please listen. Don't do the, "Hey, I'll give you a hundred bucks,

[00:24:23] if you referred Joe to me." Those programs don't work, they make you look desperate and they make you look like you're out of touch with your con, with your customer. But do a an intentional referral program internally to get handed off to other people they know internally and externally. So that's the first thing.

[00:24:40] If you're a one trick pony, the only way to really leverage your customer base from that perspective is to go get referrals. Right? Most time people don't want to, especially in larger purchase, larger purchases to 50,000 and above stuff, you can't, you aren't going to generally swipe a credit card for.

[00:24:56] They don't want the a hundred bucks, because they want to refer people and the other per, they want to feel like the other person knows they refer to them because you're great. Not because they got paid too. So that's the first thing. To put in an internal referral program. Second thing is if you're not a one trick pony, the first thing that you need to work on is the handoff from your sales,

[00:25:16] to your implementation, to your account management or customer success team. That needs to be something that each time you make that transition looks additive and it must be formalized, you've got to do a better job of saying, "Hey, the customer success team is here to help you do this." Right? "The account manager, Richard is here to help you do this." Right? And these are the things, and it's not their help,

[00:25:40] they're not here to help you just figure out how to use the software, right? They're here to help create outcomes that matter for you. And so, as an, and then you want to have an example as an example with this. Those, those are kind of the handoffs. And then the next thing, if you look at it, so you go, we can do a referral program,

[00:25:55] we have to have tight handoffs and SLA between departments as we hand them off to an onboarding account management or success, but then the kind of the other thing that works really, really well is to set up some sort of quarterly business review with them, where you're saying, "Hey, once a quarter we're going to get together." Bring in, you know, if it's you, the founder, or if it's someone below you have them bring in somebody above them.

[00:26:15] "We want to set once a, once a quarter, because we want to get feedback on where we're at. We want to hear about the strategic priorities are changing in your world, so we can be better aligned with you." Most of your economic buyers, most of your buyers will actually love that process and because of that natural, ongoing, quarterly conversation or cadence,

[00:26:35] you'll find opportunities to find out where the other deals are within the organization, that you might be able to be a part of. 

[00:26:42] Carlos Gonzalez: [00:26:42] Got it. No, there's definitely a lot of gold there. I'm really excited already. All right. Let's talk pipeline. What are the top problems that you see causing inconsistent sales pipelines?

[00:26:56] Ken Lundin: [00:26:56] Yeah. So let's, let's speak to this from. So there's the marketing side, which we'll hit really quick. Bad product market fit, which I've hit 14 times, so I think everybody's getting the trend, right? You don't speak to the solutions in your customer's language. Therefore you're spending too much on your ads and not getting enough conversions.

[00:27:10] That's one thing that can be fixed. Now let's talk about it from a sales perspective. And I would tell you the two things that are the biggest problem with say lead gen, which is like, how do I get somebody who's cold, never heard of me to say, "Hey, I might talk to you." Lead gen, the two biggest problems we see

[00:27:24] our inconsistency of activity by your sales team. They're not actually doing the prospecting and the stuff. They're not putting in the basic blocking and tackling and activity levels. Second is even if they're doing that, so you tell him to make 50 calls a day and they do. Second of that messaging may be off.

[00:27:43] We've talked about that, right? 'Cause I'm not speaking to my buyer about what I can do for them and what's on their mind, I'm speaking to them about what's on my mind. "Hey, we've got this great software and what it does, it allows you to see better reporting." Right? And that doesn't do anything for me, because what I'm actually thinking about is,

[00:28:00] "I have an employee problem and I've got to find a way to get better data, so I can better understand how to manage the employee issues that are in my world." So if you'd come to me and spoke to me about employee issues you solve instead of your software. Guess what? I would have had an appointment with you.

[00:28:14] So the messaging component is kind of that secondary thing that you really see. So it's lack of activity, poor or poor messaging at the front are kind of the two primary things we see from a lead gen perspective. And then further down that, let's say that you're actually getting enough leads, but they're all getting stuck at the discovery level,

[00:28:31] like you have a one phone call and they're going away. Well, you know, typically when you find that sort of thing happening, a discovery call needs to be reformatted in a way that's more meaning for your client. Or if you're seeing stuff bogged down, so you've got a three-step sales process, but you're selling to companies who, you know, are over a hundred million in revenue. Well, the problem with your sales process is doesn't match your buyer's process. You're giving them a proposal and step three, they are going to take 60 days to buy it and you have no reason to talk to him again. So there's kind of like, you know, so there's, you know, the standpoint of lead, there's the standpoint of what's what happens with inbound when I was the outbound from a standpoint of activity and lead gen and a messaging, you know, and then component being, "Where do we get hung up on the sales process components?"

[00:29:18] So those are, you know, four of the things that, you know,... You know, me, I could go on for a really long time about those. this.

[00:29:26] Carlos Gonzalez: [00:29:26] For sure. Well, Ken, is it even possible to create a predictable sales pipeline? I think that that's the question everyone wants to know and if so, how?

[00:29:36] Ken Lundin: [00:29:36] You keep asking all the big questions, Carlos. You know better than that. Yeah, the answer's -Yes. 'Cause here's the deal, right? Products and services are different from company to company, but the way that you grow sales is not. Right? There is a systematic formula that can be used in order to grow sales and sales pipeline.

[00:29:53] Now not every company can execute on the system the same way, because there's best practices and so, somebody may need to do step 1, 3, 6, and 12 first and somebody else may be able to go 1, 2, 3, 4, 5. There are steps in how

[00:30:06] we grow it. And they come back to some of those basic level things that we've been talking about that are just really hard to do,

[00:30:12] if you don't have an experience level where you've seen it happen across a lot of different companies, you know? And so the, the got it, got out of the messaging right, got of the activity right, got to decide what the sales team structure should look right. All that has to be going to your true north,

[00:30:26] what are you trying to accomplish. As an example, if I'm already a funded trying to grow fast company and net income doesn't matter, just sales growth does. Like a lot of the unicorns you see out there, right? If I don't need to make income that I can just pour gas on, I pour in people and process into place.

[00:30:42] On the other hand, if you're a bootstrapped yourself funded, you know, you want to get, may want to go to much more measured pace. But there's absolutely a systematic way and it really depends where you're at. More established companies, you may see the biggest lift that you can make in the next 18 months of selling to your existing clients, right?

[00:31:01] Companies, you need new logo. Okay, that's your cut costs, cost of a customer acquisition is something that we've really got to pay attention to, because if it's too high that means your messaging is wrong, the activity is not there. So, use some of those data points to really systematize whether or not it's working for you or not.

[00:31:18] I'll give you some stuff. Like if you're doing emails and sales. So as an example of outbound email campaigns, you should see better than 20% open rates and better than 4% reply rates. That tells you you have good campaigns, because most of the people we work with before they get to us have 1% reply rates. Right? A 400% increase because of the ability we're able to dial in messaging to the right personas. But all of that says kind of the following as I just jumped all over. Niche down, niche down, niche down, niche down as tightly as you can into the client that you serve with the messaging that resonates with them. The rest of it, the rest of it's all stuff that can be done together. That you can do,

[00:31:54] you can find the way to do the other things, but if you screw up the messaging or what is the outcome that you provide for your clients, no system in the world will fix that.

[00:32:03] Carlos Gonzalez: [00:32:03] Got it. So, okay. So in theory, it is possible. How long, how, how long should it, should that process take? You know, I think that, you know, that's another thing you know, companies, my, my set set down the path, you know, to create a predictable, you know, pipeline for the company and try a hundred things, but you know, maybe six months in like they, they are not seeing the results they're expecting

[00:32:29] and so they quit. You know, just for context like, how long can that process take? Is it months, years?

[00:32:38] Ken Lundin: [00:32:38] It depends. We have one client is I'll just do like use case. One client who had sat, their software client, who had sat only three kind of first meetings, the 30 days before we arrived, 60 days after they were, after we arrived, they're setting over 41st meetings a month. Okay? So that's 90 days you had that big of a swing and lead gen.

[00:32:58] There are other companies that we work with and they say, "Hey, we're not ready to invest in the salespeople yet. We don't really have the lead gen component, we're not trying to do that yet." And so we're saying, "Let's just set up the sales process." So you may have a different goal, right? So I can grow sales systematically by the front end or by doing stuff with current clients,

[00:33:14] that's one with sales goal. The other one might be, "Hey Ken, I just want, I want to improve my overall margin. I want to improve how fast we close deals and I want to improve how high we priced them." So it really depends on your goals, but you know, you can see turns anywhere as quickly as probably 90 days to something where you may spend a year putting the process in place.

[00:33:34] And as a founder, feeling comfortable that we got it, I've worked at all, know how to manage it, therefore we can go higher for it. You know, our kind of, what we do with our clients is our time to market is we'll adjust it based on the client, but it's typically substantially faster. So one of the things that you're saying is, "Hey, so I, as a founder may have put six months into it."

[00:33:55] Yeah. That's true. Problem is you're a technical founder, right? So like, it's sort of like me trying to be the head of product development. 

[00:34:03] Carlos Gonzalez: [00:34:03] Right.

[00:34:04] Ken Lundin: [00:34:04] I promise you that you'll say, "Hey." You know, you could say, "Hey, I want a basket, want you to develop a basketball." And I'd give you something that looked like spaghetti.

[00:34:12] You know, it just, it wouldn't even be close. So, I, you know, look, I'm biased. We know I'm a consultant. 

[00:34:19] Carlos Gonzalez: [00:34:19] Right.

[00:34:20] Ken Lundin: [00:34:20] Play to your strengths. Product development just trying do that. And then if you're somebody who needs help with sales, go talk to other people who you can outsource this. Kind of the building of the process too.

[00:34:29] And it's. I'm biased, just because I've seen so many companies. Most of our, most of the companies we work with have probably wasted somewhere between one and five years before they get to us, trying to figure it out themselves. How would their lives and the lives of their employees be different if the work that we did in 2020 or 21 for them, whether it was us or not, how different would that have benefited at the same level of success four years ago? So time to market is a big deal on how fast you go. 

[00:34:59] Carlos Gonzalez: [00:34:59] Right, right. Yeah. And it's important to enlist the right, the right talent, the right people. 

[00:35:05] Ken Lundin: [00:35:05] Yeah. 

[00:35:06] Carlos Gonzalez: [00:35:06] To help you do it, that makes a ton of sense. For companies that already have a sales team established, how can they set their teams up to achieve more success in sales?

[00:35:20] Ken Lundin: [00:35:20] Yeah, I'd say first thing, don't be scared of them, because I'll bet you, I bet you, a lot of people who are drawn to what we are talking about here today are technical founders. Like, "Those people aren't like you." That's true. But I'll be scared of them. And you have to have a basic understanding of what the job requires

[00:35:35] and that service level agreement with your sales team of the basic blocking and tackling. We often tell people, "If you'll do the blocking and tackling, which is the calls, the activity, the thing, we can make you into a superstar." Right? "But if you won't show up at the field the play, it doesn't matter what we put in place for you."

[00:35:55] So I would say two things. These are joint and feel that you need to have a pr, have a process that's repeatable in place, just like you would during product development. Let's say that you're doing, you know, let's say that you're used to every talks about agile versus waterfall, you know, kind of think of these as doing these things that agile sprints.

[00:36:11] Right? And just think about, "I want to put a process in place for a particular component of my Salesforce, so that it can be reproducible and reproducible." And then we can test when we see that part failing. So I'd say that's probably the kind of the first thing when you think about it, you've got a sales team in place.

[00:36:28] You know, we know that 67% of salespeople don't reach quota. And I would argue that most of the time that's the founder's fault. Because they haven't sought out the experience or haven't taken the time to put a repeatable process in place to make sure the expectations are known by the salespeople and then to manage them.

[00:36:49] Most founders manage salespeople like this, "Brian's bugging me. Brian's bugging me. Brian's bugging me, Brian's bugging me." And nine months later, "Brian, you're fired." Did you ever talk to Brian? -No. Did you ever get Brian help? -No, 'cause I'm not a salesperson. Did you ever coach him? -No, didn't do that. Right? 'Cause we think founders think sales

[00:37:05] is a black box. They're just like, "Man, I'll just go try to hire the right

[00:37:09] guy and put the, put them into this thing and let it happen." But as you would kind of heard me allude to throughout this, it's not a black box. There's a way to do it repeatably, but it requires a set of expertise that is a,... you have to be okay

[00:37:23] trying to develop it in yourself or you have to look for help somewhere. Because the next thing that all those people do that have a sales team, and they're saying, "Hey, we're ready to scale because my product is now in place." They go hire a VP of sales who has a big company name on it. They're overpaying them

[00:37:40] and the problem is that the person has never built a sales process. They only executed on the one that they showed up to at the big company. And then you end up firing that person inside of 18 months. So it just the problem with all that is think about the amount of money that you money and time you've put away while you're doing that process.

[00:37:57] It can get expensive.

[00:38:00] Carlos Gonzalez: [00:38:00] All right, very good. I know you touched on this earlier, but I wanted to, you know, ask this question more, more specifically. From, from a sales perspective, what should companies aim to have in place before considering raising capital or exiting a business?

[00:38:17] Ken Lundin: [00:38:17] Yeah, yeah. The number one thing is you need to have active control over your pipeline and be able to speak to it. And because what investors are trying to figure out is this, "Is if I put a hundred people into the top of your funnel, who might be interested in talking to you, how many sales are going to come out?" Right? And it doesn't need to be a perfect funnel, it's just gotta be data. Because what, what you're doing, think about it when you're trying to raise capital, let's think about your perspective, not from a VC's perspective or a PE's perspective, right? When you're trying to raise capital, the number one way that you can and increased valuations is by decreasing cash flow risk to them.

[00:38:50] Decreasing risk is how you get a higher valuation. And so if I can show that, "Hey, if you'll give me capital, I can pour gas on this fire, which then will produce this many deals and this many sales over this time period." They'll give you more money for less equity. Right? That's how that works. That's why we say traction so important because it totally, it lowers your cost of capital. And so if you're looking for it, you have to have active control over your sales pipeline and here's the good news. They don't want you to be perfect about it and they want you to be able to say, "Well, between our discovery call and our demo, our conversion rate stinks, but we know that it's a 25% and great teams perform at 50 to 60." Awesome. "What are you doing to adjust it? We're really leaning into trying to make that more customer centric." Awesome. Right? It's a cost of capital is a huge thing that we can get through. If you understand your pipeline, you understand where deals are coming for and understand where they're going out.

[00:39:45] I'll give you a, and I'll give you a proof that high valuations come from that. Unicorns are privately held companies are worth a billion dollars. But it's interesting because most of them are only doing 50 or 60 million, 70 million in sales. So how do they get a unicorn valuation? Basically on sales growth

[00:40:08] and because the investor generally gets a liquidity clause installed that says, "Hey, we'll give you a valuation of a billion. We're going to give you a hundred million, but we get paid a hundred percent of our capital back before you make a dollar." So think about it. They're willing to give that super high valuation as long as they get their money out first. It's because, believe it or not, they're risk averse and there's more money than there are good ideas.

[00:40:37] So get control and understand your pipeline, that will lead to higher evaluations that you can give up less equity for. 

[00:40:45] Carlos Gonzalez: [00:40:45] Makes sense. Makes sense. Just so that you know, for the audience that are, that are going to embark into this whole like sales, strategy, figuring out how to create a predictable sales pipeline and everything that comes with that. Can you list what you think are the top obstacles that they are going to face in that process?

[00:41:08] Ken Lundin: [00:41:08] Yeah, so understanding the appropriate sales tech stack to use for it is one client centric messaging is too, because what you think is client-centric isn't all the way there. You get, and here's the way you get around that. Ask your clients, "You bought us for this reason, but what would make you kick and scream now that you've realized we do for you,

[00:41:25] if we took it away." Right? So that's another way you can get on that. So I'd say, messaging is a big component of it, the ability to put in a process, right? The, that you'd have that you understand, we've talked about the importance of controlling the pipeline process, I think that's a big one. More importantly than that, don't just go do a sales playbook, because it's about operationalizing the playbook.

[00:41:45] Like you have to understand, the how? Like, I think the biggest thing we talk about is a lot of people know why something, why they should do something, what they should do it, they don't know how though. Right? And so operationalizing a playbook means that you have to be willing to do sales training with your team and it means you need to be willing to coach them. And you need to understand the number one thing that you're trying to do if you're going down this journey, and you're trying to get to a point where you can scale is you're changing human behavior, yours and your teams. And if you want to see how long it takes to change a human's behavior, try having an argument with a five-year-old. Right? 'Cause next week they're going to come back and ask for the same thing all over again. Right? So understand human behavior takes a while to change. I think you know, that's kind of the big, a big component of it. And then matching the other then on the kind of the last kind of big, big pot would be matching your sales cycle to the buyer, to your buyer's buying cycle. 

[00:42:44] Carlos Gonzalez: [00:42:44] Got it. Yeah. There's definitely a lot of gold there and in, in our conversation here as a whole. So if, if after listening to all of this, someone is not convinced by your perspective on sales, what would you say?

[00:42:56] Ken Lundin: [00:42:56] That's cool. That'd be the first thing I'd say.

[00:42:58] That's cool. Like, I don't... in no way shape or form have I ever claimed to be right about everything in the world? We get, we know, we know sales pretty good, but but I wouldn't claim. But I, what I would tell you is this, just continue to look at the other resources out there, but do this.

[00:43:12] You want to understand more about sales, but you're confused by the fact that when you do a search for sales books on Amazon or Audible, there's seem to be a trillion choices. Here's how you go through that process. Pick a book or two, do it by how they're rated. But then here's what I want you to do. Instead of listening to the couple books and then taking each idea from each book as it's an independently executable thing, group your ideas together as a, this all these things talk about lead gen, all these things talk about sales process, rather than taking the one piece for each book and trying to implement it. Because what you got to understand is this. Everything there was to be written about sales was written at least 25 years ago and the only difference between companies who do really well at it and don't is execution of a solid process. So think about it from that perspective. Get other resources. Heck you wanna, you don't want to tell me all the reasons I'm wrong? I'm everywhere on social media and all that and I'd love to have the conversation with you.

[00:44:23] Carlos Gonzalez: [00:44:23] All right, Ken. Is there anything that I haven't asked that you wouldn't want to leave our audience with?

[00:44:30] Ken Lundin: [00:44:30] Yeah. Now that we made it sound so darn challenging, knowing this growing a company is a blast. It's a lot of fun when you execute it right. I was with a company that went from 2 million to just under 80 million nationally in over four years. That's so much fun and done right. It's actually, the your job is substantially easier than when you're kind of just going like this.

[00:44:52] So, you know, lean into it, have some fun, keep your client just centric and face forward. I don't think there's anything you didn't ask, but just, you know,... Being a founder. It's got us up days, it's got it's, it's got its down days. You're the last person to get any praise and you're probably the last person to get paid

[00:45:09] in your company. Um, mad respect for that. And just to have some fun grow, have some fun growing it. 

[00:45:17] Carlos Gonzalez: [00:45:17] Awesome. Well, Ken, I think we're coming up on time here. So where should people go to learn more about you and Ken Lundin & Associates?

[00:45:27] Ken Lundin: [00:45:27] Perfect. Yeah, there's a couple ways. You can go to our website, which is kenlundin.com, which I'm sure you'll have probably in the show notes or something. And you can also hook us up on LinkedIn. So LinkedIn, I am, I'm pretty active on. You come on there. We get out sales tips every day. And then if you saw, if you saw me, if you saw this or heard this, when we talking to Carlos, shoot me a direct message. We'll give you a free 30 minute strategy session.

[00:45:51] And then I can also be reached at ken@kenlundin.com. 

[00:45:56] Carlos Gonzalez: [00:45:56] Great. Really appreciate you, Ken. Thanks again for spending time with us today. It was great having you on the Digital Footprint.

[00:46:07] Ken Lundin: [00:46:07] Perfect. Thank you brother. And I appreciate, appreciate you bringing  me on.

[00:46:09]

[00:46:09]Carlos Gonzalez: [00:46:09] All right, let me do that last part again. Well, Ken, thanks again. I really appreciate you spending some time with us today. It was great having you on the Digital Footprint. 

[00:46:20] Ken Lundin: [00:46:20] Thanks, brother. I appreciate it. And thanks for having me on. I had fun.